California online poker

California has been trying to pass an online poker bill since 2008. Progress has been, to put it mildly, trivial. Read the latest California online poker developments below, and scroll down for a synopsis of the status quo for legal online poker in California.

California online poker legislation

The states’ various potential stakeholders, which includes tribal gaming, nearly 100 licensed card rooms, and the union-backed horseracing industry, have taken hardline positions on several key issues. This, coupled with each group’s political clout, has insured that all online poker bills crash and burn.

In many of the stakeholders’ eyes, they prefer the status quo over an imperfect bill.

2018 outlook for California online poker

California doesn’t appear to be any closer to legalizing online poker than it was last year, when a lack of consensus over so-called bad actor language stalled progress. There are no bills that appear to be active.

The fact remains that in order for any California online poker bill to make headway, the deep divide between the PokerStars and Pechanga coalitions over the bright line for suitability would have to be bridged. Someone is going to have to budge. Thus far, neither side has shown a willingness to do so.

Going further, there just doesn’t appear to be a strong appetite for online poker in CA anymore, although it remains a potential source of new revenue in the state.

Background for California online poker

California’s efforts to pass online poker legislation extend all the way back to 2008. Suffice it to say, progress has been trivial.

The primary difficulty has been crafting a bill that appeases all stakeholders, of which there are many. California’s gambling industry consists of nearly 100 licensed card rooms, tribal casinos, and a union-backed horseracing industry. Each has taken a hardline position on several key issues. This, coupled with each group’s political clout, has insured that all online poker bills crash and burn.

The status quo appears to be preferred over an imperfect bill in many of the stakeholders’ eyes.

2017 in review

Card rooms and approved tribes would be able to offer online poker to those of legal age.

Racetracks would not be eligible be become operators, but would receive up to $60 million per year as a stipend from online poker revenue.

The licensing fees would be set at $12.5 million for seven years. This would be credited against future tax payments from online poker revenue.

Staggered tax rates based on total industry revenue, ranging from ~8.85 percent to 15 percent.

The bill never made any real progress, however.

2016 in review

There were a series of promising developments in 2016. Ultimately, a lack of consensus on one critical issue — suitability — derailed efforts.

The 2016 effort kicked off in much the same fashion as the 2015 push, with a bill sponsored by Gray (AB 2863) unanimously passing a committee vote. The major difference being the horse racing industry favored the bill, as it would be granted a substantial subsidy in exchange for sitting on the sidelines.

Gray flip-flopped on suitability language. At first, the bill set the bad actor brightline to December 31, 2011. This clearly favored the PokerStars coalition (PokerStars pulled out of the US in April 2011). A tribal coalition spearheaded by the politically powerful Pechanga Band of Luiseño Indians and Agua Caliente Band of Cahuilla Indians staunchly opposed this provision.

Then, an amendment was added that would effectively force PokerStars out of the market for five years. Now it was PokerStars and its allies that took on the role of obstructionist.

Without consensus among the state’s two most influential coalitions, the bill could not muster enough support to justify a vote on the Assembly floor. AB 2863 was ultimately shelved.